NFL TV blackout rule flagged by lawmakers

As Americans loosen their belts and settle on the couch to binge on Thanksgiving NFL football, they can be thankful that no games this season have disappeared from their TV screens.

But that doesn’t mean the battle has ended over sports blackouts — where fans have their television access blocked if the local team doesn’t sell out. Lawmakers and regulators are pushing back on behalf of consumers, and fans hate the rule.

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Just ask fans in Buffalo. Bills owner Ralph Wilson Jr. recently purchased the remaining tickets for the team’s game vs. the New York Jets to guarantee a sellout and keep the broadcast on local television.

“The plain and simple fact is that blackouts prevent fans from watching the games they deserve to watch,” Sen. Richard Blumenthal (D-Conn.) said in an interview.

At the center of the controversy is a 1975 FCC regulation that prevents pay-TV operators from airing a sporting event if it is blacked out on local TV stations.

Such blackouts are drawing increased scrutiny from Washington policy makers concerned that high ticket prices put games out of the reach of many consumers and that the FCC rule isn’t keeping pace with the explosion of new ways people consume sports, including on iPads and other devices. Recent “retransmission” disputes between media giants — like the kind that pitted CBS against Time Warner Cable earlier this year — have also threatened consumers with programming blackouts in major cities, sparking further public backlash against the practice.

Blumenthal and Sen. John McCain (R-Ariz.) are leading the congressional fight to end the sports blackouts, testing the relationship between the NFL and the government. They introduced legislation that would repeal the professional sports leagues’ antitrust exemption if they continue with the practice.

“It’s wonderful that they haven’t been abusing fans this year,” Blumenthal said. “But they know the legislation is looming if they engage in blackouts. It’s a not-so-subtle pressure.”

The NFL defends the rule, arguing that it helps to fill stadiums and heighten the professional football experience.

“Professional football is a stadium sport, not a studio sport,” explained league spokesman Brian McCarthy. “The excitement that one feels in a packed arena or stadium translates onto television, and thus improves the television viewer’s experience. So, for both the fans in the stadium and the fans watching television, a packed stadium matters.”

According to the league, the number of blackouts has fallen by the decade with 92 percent of the games going on the air in the 2000s compared with 69 percent in the ’90s and 60 percent in the ’80s.

While that may be true, there are indications that the NFL is listening to the grumbling. In 2012, the league changed its policy: A blackout can now be avoided if a team sells 85 percent of its tickets.

Even though the blackout rule applies to all televised sporting events, it has, in effect, become the NFL’s rule as the league has some of the most restrictive blackout policies and is fighting the hardest to keep the rule.

“They are the only league that blocks out an unsold stadium,” said David Goodfriend, executive director of the Sports Fan Coalition, which got the anti-blackout ball rolling.

Goodfriend, who is also a lobbyist for DISH Network, contends that the fight over the blackout rule is tapping into broader concerns over the benefits the leagues get, ranging from publicly-funded stadiums to antitrust exemptions.

“What Senator Blumenthal and Senator McCain are saying is: ‘Enough with your free gifts. Enough with the monopoly,’” Goodfriend said. “We need to start demanding positive behavior toward consumers in exchange for these gifts, or they just shouldn’t take the gifts.”

The rule has a long and tortured history that is rife with government involvement. Congress approved the Sports Broadcasting Act of 1961, carving out an antitrust exemption that permits joint broadcasting agreements among the NFL and the other major professional sports leagues. It also gave the league the right to black out games.

Early on, blackouts were so prevalent that Congress took action in 1973 to amend the law so local blackouts could come only when a venue fails to sell out 72 hours before game time. The law’s blackout amendments expired in 1975, but the FCC kept them alive at least as far as pay-TV outlets are concerned.

Now the FCC itself is questioning the need for the rule. Commissioner Mignon Clyburn pushed an effort earlier this month when, as acting chairwoman, she circulated a proposal that could have brought an end to the rule.

“Changes in the marketplace have raised questions about whether these rules are still in the public interest, particularly at a time when high ticket prices and the economy make it difficult for many sports fans to attend games,” Clyburn said at the time.

It’s unclear where newly appointed FCC Chairman Tom Wheeler stands on the issue, and he declined to comment for this story.

Still, it’s a popular issue at the commission. NFL representatives have been in to lobby the commission three times in the past two months over various aspects of the rule. And since the Sports Fan Coalition filed its petition in 2011, the issue has generated more than 300 comments.

Some argue that the rules actually help keep the games on free television. The blackout rule is one of a troika of regulations designed to preserve free, local broadcast television. It also acts as a counterbalance to copyright law that allows pay-TV operators to retransmit programming without the express permission of the rights holder by paying a government-set royalty.

“The rule wasn’t written to protect the NFL,” said a source close to the league. “It was written to protect broadcasters. The NFL will continue to have its blackout policy. It’s the broadcasters that are hurt because if the Chargers game is blacked out, the cable operator will bring in [another] signal, so it’s the local CBS affiliate in San Diego that gets screwed.”

And the source noted that most other professional sports leagues have already taken their games to pay TV platforms.

“Contrast that with the NFL,” he argued. “Every game of your team is on over-the-air television. Every single game whether they’re playing on NBC or ESPN or the NFL Network, the league has structured its policies such that every game will appear in the local market over the air, so you can pay zero dollars so you can watch every Redskins game, and you can see every playoff game for free.”

Broadcasters also are fighting to keep the rule. National Association of Broadcasters President and CEO Gordon Smith said the rule helps local stations remain viable.

“My worry is, if you bring in a distant signal and overcome the contractual relationship that exists, what you do is undermine that local brand, that local station,” he said.

Congressional gridlock may conspire against the legislation, but it could also get attached to the renewal of a law that allows satellite TV companies to import “distant TV signals” into local markets for people who can’t receive television with an antenna. The law known as STELA expires in 2014 and is considered “must-pass” legislation. Congress extended the blackout rule to satellite TV operators in STELA’s predecessor.

Blumenthal admitted the legislation is facing a tough road but said the issue still resonates with Americans as sports is one of the few activities left that brings the nation together.

“Athletics bind us together,” he said. “Even in the Senate where we disagree on so much, we can always have a great conversation about sports.”